The latest developments surrounding Chainlink (LINK) have been drawing attention, particularly with the significant increase in whale transactions, creating an atmosphere similar to previous market uptrends.
While whale activity may indicate that large investors are acting to make short-term gains, it also signals potential instability in LINK’s upward movement.
According to Santiment, the increase in these large transactions coincides with critical periods of significant price fluctuations and indicates that large investors are taking a cautious approach.
In the Chainlink market, where whale activity has increased recently, this situation stands out as a factor affecting the sentiment and price stability in the cryptocurrency market.
Whale Transaction Surge Creates Fear
This increase in whale transactions attracted market attention, especially as the Chainlink price exhibited sharp fluctuations. In late November, when LINK broke through the $20 level, the volume of whale transactions exceeded $1 million, creating a significant change in trading volume.
While this increase increased investor interest as Chainlink continued to trade above the $22 level, trading volume began to decline in the following weeks. This coincided with two days of the highest trading volumes in the last three months, but it also began to create uncertainty among investors as LINK fell below the $20 level.
These trades, which occurred specifically on December 20 and December 26, coincided with LINK’s price rejection at around $25, creating increasing anxiety among major investors. The observed trading activity mirrors a pattern from the second half of 2021, suggesting that profit-taking may increase during periods of waning market enthusiasm.
The general assessment in the market has been drawing a pessimistic picture for Chainlink (LINK) in recent weeks. The liquidation heatmap reveals that the price support for the asset has decreased after its peak levels, and this is quite significant.
Over the past week, LINK has faced persistent downward pressure, raising concerns about the sustainability of bullish momentum. Liquidity points forming below short-term support levels suggest the market is seeking lower price levels.
In particular, the rebound seen at $20 on December 30 has become an attractive target for sellers seeking liquidity. If these downtrends continue, further declines are likely, reinforcing a cautious approach among traders operating in a high-risk market environment.